SAN FRANCISCO (TheStreet) – Controversy over Apple's (AAPL) "Bendgate" and iOS 8.0.1 update kicked its shares lower Thursday, prompting the iconic electronics maker to close down 3.81% at $97.87 a share. While the broader markets also posted a decline, Apple's two problems didn't help its situation.
For those not familiar with "Bendgate," allegations are surfacing that the larger iPhone 6 Plus, which features a sizable 5.5-inch display, bends when it's in a user's pocket. That potentially spells bad news for Apple, which has touted record sales of its new iPhones.
The company issued a formal response late Thursday, telling several publications, including The Wall Street Journal and CNBC that only nine customers had complained of the bending issue, and that it was extremely rare under normal usage.
ALERT: Apple says only 9 customers have complained to the company about bent iPhones. (via @jonfortt)— CNBC Tech (@CNBCtech) September 25, 2014
Apple's stock also faced the double-whammy of the company retrieving its iOS 8.0.2 software update after releasing it. The company's latest update to its mobile operating system, iOS, reportedly caused cellular service to drop and Touch ID function screen problems on the phone.
Yahoo! (YHOO) investors panned the stock, sending it down 2.33% to close at $38.95 a share.
The Internet giant faced the wrath of its shareholders after disclosing in a Securities and Exchange Commission filing that its Alibaba shares were subject to a one-year lockup, in which they can't be sold. Here is what the filing says:
Yahoo was required to sell the 140 million ADSs in the IPO pursuant to the Share Repurchase and Preference Share Sale Agreement, dated as of May 20, 2012 (as amended, the "Repurchase Agreement"), by and among Yahoo and Alibaba. The Repurchase Agreement originally provided that upon a Qualified IPO (as defined therein), Yahoo would sell up to 261.5 million ordinary shares of Alibaba either back to Alibaba or in the Qualified IPO, at Alibaba's election. Yahoo and Alibaba subsequently agreed to reduce the number of ordinary shares required to be sold by 121.5 million ordinary shares (the "Reduction Shares") to 140 million ordinary shares. Alibaba elected to have Yahoo sell such shares in the IPO.
In connection with the IPO, Yahoo entered into a voting agreement with Alibaba, Jack Ma, Joe Tsai, SoftBank Corp. and certain other shareholders of Alibaba, pursuant to which Yahoo agreed to certain voting arrangements, including an agreement to vote for the director nominee of SoftBank Corp. and the director nominees of the Alibaba Partnership (a partnership comprised of members of management of Alibaba, one of its affiliates and/or certain companies with which Alibaba has a significant relationship), and granted a proxy to Jack Ma and Joe Tsai, Alibaba's executive chairman and executive vice chairman, respectively, to vote, subject to certain exceptions, the Reduction Shares or, if less, the remaining ordinary shares of Alibaba then owned by Yahoo.
Further in connection with the IPO, Yahoo entered into a lock-up agreement with the Underwriters restricting the sale of its remaining ordinary shares of Alibaba for a period of one year, subject to certain exceptions.
Hewlett-Packard (HPQ) shares fell 1.89% to close at $35.27 a share, as the company faces a potential blacklisting from selling products and services to the Canadian government.
The technology giant may be on the ropes for a 10-year ban, according to a report in the Globe and Mail. Talk of a ban stems from the company's recent U.S. bribery conviction, in which the company plead guilty to charges it bribed Russian government officials and agreed to pay the Securities and Exchange Commission a $108 million fine.
Canada apparently is considering taking action as a result of HP's activities in Russia. Canadian rules call for vendors to get an automatic ban from selling to its government if convicted of any crime, even if it happens outside the country's borders.
--Written by Dawn Kawamoto in San FranciscoTheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLE INC (AAPL) a BUY. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: AAPL Ratings Report